Gloomy global economic outlook

Volatility is making it difficult for fund managers to predict the future, and as a result they are trending towards pessimism. The focus is less on earnings growth and more on “balance sheet strength and sustainability”.

At the same time, steel companies are still braced for falling prices as buyers delay orders because of nervous about the global economic prospects, including a slow-down in demand from China, “the chief locomotive in driving up the expansion of the global industry.”

Steel prices are currently around break-even for some suppliers, and buyers are delaying orders in expectation of further price drops.